The Glint of LED

Shawn Roberts is shining a light on the commercial LED industry. So much so, the lighting veteran is hanging his latest startup on the technology.

“Candlesticks changed to kerosene lamps. Then, kerosene to electricity, but there hasn’t been much change since,” Roberts said. “Now, we have LEDs.”

Roberts and business partner Kevin Fink launched Ozark LED in November as a complement to his landscape-lighting company, Nightworks Lighting.

Though light-emitting-diode systems have been around since the 1960s, with his 15 years of lighting installation experience, Roberts is predicting a critical mass of demand around the corner.

He might be right.

According to Springfield Business Journal research, organizations such as Fast N Friendly, Nixa Public Schools, CoxHealth, Bryan Properties and Youngblood Auto Group have started converting traditional lighting to LEDs.

Joe Naegler, who co-owns Fast N Friendly convenience stores through Naegler Brothers Inc., said the company plans to spend around $200,000 over the next couple of years on exterior LED lighting.

He said the company would soon start with pole light conversions at its Battlefield Road and Scenic Avenue store and slowly convert canopy and interior lights across its 14-store footprint.

“Those big 1,000-watt metal halo-bulbs are killers,” Naegler said, adding it typically costs around $300 apiece to change them. “We put new lights in something every damn day. Light bulbs are a hell of a big business.”

Naegler’s not alone. The LED lighting market is anticipated to balloon by 45 percent per year through 2019, according to Winter Green Research.

In 2012, LED sales generated $4.8 billion in North America, and that figure is expected to move to $42 billion by 2019.

“We are at a tipping point,” Roberts said.

On the heels of quadrupled sales for his 5-year-old Nightworks Lighting, Roberts forecasts $1 million in first-year sales for commercial-focused Ozark LED.

Public sector
City Utilities of Springfield is doing what it can to move the industry forward and help the environment. A CU rebate program provides savings for commercial properties based on energy reductions through new lighting.

“Since 2007, we have issued 272 commercial lighting rebates, with a total of 176 individual customers participating,” said Cara Shaefer, CU director of energy services and renewables. “Our program is designed to encourage customers to participate multiple times to get the most efficient lighting installed, yet work within their budget constraints.”

She said the collective electric savings through the rebate program is equivalent to the annual energy consumption of roughly 1,200 homes.

Joe Eakins, a program administrator for CU, said rebates are typically approved in industrial settings and can be up to $200 per fixture.

A school district to the south of Springfield is undergoing a limited LED conversion with the aid of its contracted maintenance team.

Nixa Public Schools Assistant Director of Facilities Brandon Thomas said LED installation was scheduled over the winter break in the high school gym, a commons area and a band room.

He said 34 fixtures would be replaced at a cost of around $800 apiece and Sodexo Inc. is spreading out the $25,600 cost over the course of the maintenance contract.

Joe Albright, vice president of technical services for kindergarten-12th grade facilities at Gaithersburg, Md.-based Sodexo, said the company has a policy to use energy-efficient lighting when it can, and LEDs are increasingly becoming more affordable.

At Nixa, one of 50 school districts with Sodexo maintenance contracts, officials estimate a 37 percent annual reduction in utilities.

The district also expects labor savings with LED lamp replacements needed every 100,000 hours versus the 20,000-30,000 hours with the former high-intensity discharge lamps.

“Changing to LEDs is an integral part of our overall energy cost-cutting solutions for our school systems. And it’s not just because of the energy savings that is accrued,” Albright said. “LED is what I’d term a cleaner light. LED is a true light. … It creates much less eye strain.”

Albright said Nixa is among the first few districts in the Sodexo system to begin LED conversions.

Upfront costs
Roberts said energy savings are big – up to 80 percent compared to fluorescent systems – but upfront costs can be prohibitive. He’s been working with LED manufacturers, such as Durham, N.C.-based Cree Inc. (Nasdaq: CREE), in an effort to keep costs down.

For instance, it cost about $1,000 to change out an exterior parking lot light with LED, Roberts said.

“If you were going to pay $1,700 a head that would take you eight years to recoup your money and you had a 10-year warranty – getting two free years on utilities doesn’t make a lot of sense. But, if you could get it for $900, suddenly the (return on investment) is three and a half years. Then it makes sense,” he said.

Like Fast N Friendly, Kum & Go LC sees a benefit in using LEDs.

The West Des Moines, Iowa-based convenience store chain is in the middle of investing $24 million through 2015 on store renovations and new facilities across its 46 Kum & Go stores in Greene County. Chad Oppenhuizen, sustainability advocate for Kum & Go, said all new stores have LED lights indoors and outdoors.

“You can look to the other major retailers that are including LED fixtures in all facets of their operation,” he said by email, declining to estimate the costs for LED investments. “They would not be investing in LED unless the ROI was present.”

Naegler, who has contracted with Roberts, is not altruistic about the conversions. While government regulations can promote environmental solutions, Naegler said real change comes from innovations that bring costs down. He said the moves make business sense.

“When science and engineering work together to come up with a better solution at a lower cost, that’s all that moves things forward,” Naegler said. “There’s nothing wrong with alternative ways to produce energy or save our environment, but it only happens when the bottom line is better.”